B&B plans to reconfigure Merseyway

The Merseyway shopping centre in Stockport town centre is set to see internal development to create larger units for tenants keen to expand.

The centre was previously owned by a company of Simon Halabi, the London-based property investor. Bradford & Bingley called in a reported £100m loan on the 350,000 sq ft centre a year ago and appointed GVA Grimley as receiver.

Peter Barker, director at letting agent Savills, declined to give details of the work now being planned but added: "We have two asset management measures we are looking to facilitate to accommodate the upsizing needs of some of our bigger retailers."

River Island, Next and Boots are among the tenants wanting to increase the size of their presence in Merseyway. Barker said interest from newcomers is returning to the centre following the collapse of the Bridgefield scheme and a deal was signed with Virgin Media recently.

Mark Rawstron, director at GVA Grimley, said owner Bradford & Bingley would hold the asset for the medium term, maybe two to four years, before seeking to sell it.

Rawstron added: "The previous landlord wasn't flexible on doing deals below historic rental levels as the recession took hold. It became a massively over-rented scheme but we can more flexible now."

The 1960s centre is in need of a revamp but the initial works will stop short of a full refurbishment. The centre has 104 units and produces a rental income of £9m a year. Halabi was asking for Zone As of around £160/sq ft for the covered area and £100/sq ft outside.

Justin Mortimer, of Cheetham & Mortimer, said: "They may have to spend on development and take a little pain to save the centre. It is in a bit of a mess and has seen retailers leave as the previous owner was holding out for top Zone A rents and tenants simply couldn't afford to trade there."

Tushingham Moore is joint agent on Merseyway.